Skip to main content

tv   Fast Money Halftime Report  CNBC  October 25, 2012 12:00pm-1:00pm EDT

12:00 pm
called romnesia. a 42-ounce coke from new york just to show he could. and just for men. welcome to the halftime report. i'm michelle caruso-cabrera in for scott wapner. four hours to go until the close. here's where we stand right now. little mini rally we had this morning, poof, it's gone. major averages sitting very close to the lows of the session if not there already. industrials lower by 16 points. 1361. s&p 500 lower by a point to 1407. had gone to 1421. nasdaq lower by half a point. you're essentially looking at the lows for the entire week for the major averages. here's what we're following on "halftime." bull versus bear. earnings taking a hatchet to the recent rally like you just saw. should you be buying the dip? we'll talk to a top strategist. plus, emerging opportunities. morgan stanley sees green chshos
12:01 pm
in canada. why one fund manager disagrees and where else he's putting his money now. our top story. the battle of the two tech titans. apple versus amazon. both companies reporting after the bell today. but which stock is the better bet right now? let's trade it with stephanie link, joe ter nokn terranova an murphy. >> i like the fact that expectations have come down. i like the fact it's a product cycle story, an ecosystem and all that. fwen gwen, the fact th again, the fact that the expectations have come down. amazon is a great story. but what bothers me about amazon, you don't really have the operating leverage because they have such challenges on the margin side. i think the margins are going to have a hard time going materially higher as they're making all of these investments. i like the risk/reward on apple better. >> mr. new world?
12:02 pm
>> yes, michelle. amazon. >> amazon? >> no. let's first talk about amazon. i think stephanie's correct. the challenge is the margins. you have to believe margins have troughed. in terms of a pure price performance amazon continues to defy the fundamental challenges it has. apple is the name i trade. let me walk you there what i think will happen. it relates to an experience i had this time last year. i was taken out of apple on a stop below the 200-day moving average. i think potentially the same scenario sets up tonight. the 200-day moving average is at 586. everyone is going to be looking at it. on a flush below 586, contrary to what i did last year which was get out, that's when i'll get in again. it seems to me the market is gravitating toward that level. >> slim shady? >> i think joe is probably spot on with that if it does come
12:03 pm
down to test that level. the 586 level could cause a flush of selling. i'm looking at it from the other way. i'm long apple right now, michelle. i think the stock can get back above the 626, 627 100-day. that would get people coming into the name. if you look back to the april quarter there was a similar setup. the stock was down almost 14% coming into the quarter then rallied big on earnings. the setup here, if you can gbuy apple when expectations are being ratcheted down, it's a great time. the ipad mini is going to be able to be held in one hand. whereas the original ipad you needed two hands. it was tough to navigate around. i think this is a great move for the company. >> any conversation that involves the size of your hands, mike murphy, that's fine with me. let's talk about the one-week chart of apple. let's bring it up. apple right now is testing last friday's lows. everybody here is taurking about how low the expectations are or how they ratcheted down. see the mini ipad rally there
12:04 pm
mid-session. weigh in here. thoughts on apple or would you rather by amazon? >> i think apple is the much better long-term story. one caveat, though. i wouldn't buy it here. i would wait until december. the problem with apple is that the product cycle is really what drove a lot of the rally over the last three months into september. the product cycle now going forward is really going to be based on supply concerns. i think it takes a couple months for apple to get sorted on the supply side. december is a better entry point. >> let's talk more about apple. the recent sub par performance, we were just showing you the one-week chart. could it be a hint investors are expecting an earnings miss tonight? sanford bernstein joins us now. you're one of the people who says a miss could very well happen tonight. tell me by how much and why? >> good morning, michelle. absolutely. i do think particularly on the revenue side, apple is very likely to miss revenues. there have been supply constraints that have been very
12:05 pm
real on the iphone 5 side. and apple revealed earlier this week when it introduced the mini that it sold 100 million ipads. do the math on that. that points to 14 million to 15 million ipads for the quarter. well below the 17 million to 18 million most people have in their models. put those two things together and we could see apple miss revenues by a couple billion dollars today. >> what does that mean in terms of how you deal with the stock. it's still one of your top picks, isn't it? absolutely. >> tell me why. >> i agree with stephanie's perspective. this is a great fundamental story that's trading x cash at less than ten times earnings. so i think for investors who have a six month or longer time horizon, the 12% pullback in the stock off its recent highs provides a really good entry point. >> tell me about the mini ipad and your worries about it cannibalizing the ipad. >> absolutely. the mini ipad was largely in line with what many of the press reports had suggested. what was different was it was
12:06 pm
$329 price. closer in price to the larger ipad than we had expected. i think additionally the functionality is eerily similar. i think we are going to have substantial cannibalization not only of the larger ipad, but also the ipod touch which semis f -- sells for a similar price point. the net impact is going to be very, very small. >> shady, you had a question? >> it's mike murphy. if you go back over since the original ipod was launched, any time apple had supply constraints and it has come up a few times, the stock sells off a little bit, it's a screaming buy. also, any time new product has come out, like if you remember with the ipad -- the ipod touch, people were questioning whether or not there was much of a difference there. again, any pullback was also a buy. do you not see the same setup here where people are knocking the ipad mini, but that it will take off and set records again
12:07 pm
in the very near term? >> i think the mini in and of itself will have very strong sales. so we think it's not implausible that 30 million minis could be sold in the first year. i just simply think that that's going to be at the expense of the larger ipad. now, quite frankly, even if you said there's no cannibalization at all and you said that the mini is 100% acreetive and they sell 30 million units it only adds 3% to apple's eps. apple is a huge company. it's a relatively lower priced, lower margin device. >> thanks for joining us. appreciate it. >> my pleasure. the big question mark that continues to haunt the euro, spain. worries hitting the euro today. this week steve liesman has new insight from someone in the know. he joins us from the buttonwood gathering of u.s. policymakers in new york. >> reporter: michelle, i talked earlier today with former ecb governor who was there during a lot of the financial crisis.
12:08 pm
left about a year ago today. i asked him about spain. he said spain must request these rescue funds from europe. he expects it to happen but says if spain does not, it cannot sustain its recovery without it. i asked him also broadly about an idea we've talked about on this show quite a bit. the idea of the euro which has defied a lot of predictions and remains strong as well as ecb policy. here's what he said. >> i think the current economic situation would justify a weaker euro. i think there is -- it depends what the fed does and what the central bank does. >> michelle, i don't know where your traders have been on the euro. i do know i spoke to a lot of current and former officials and everybody says that europe would benefit from a weaker euro. however, the currency has defied expectations, staying up around that 1.29, 1.30 area. there's some talk that mario draghi, ecb president, ought to step forward and essentially
12:09 pm
talk down the euro. unfortunately, that's not been something he's shown any tendency to do, michelle. >> no. i think we're all shocked. it's really been incredible. there have been so many predictions for its full on demise, parity to the dollar. here we sit, 1.29, 1.30 forever. >> i think one of the keys is what smaghi also talked about. bringing down the ecb rate, now 75 basis points. they have 75 basis points to cut to get back to parity. that could be something that could weaken the euro, help the german economy, help some of the peripheral economies. very hard to dig your way out of a hole when your economy is declining the way it has been in a lot of europe. >> steve, real quick, it's joe. when you look at the situation right now in europe, it seems as though the banking union, it's really quality over speed as the germans have said. we're not getting the banking union as quick as the market wants. in essence the improvement in
12:10 pm
spanish yields are pushing that off. if the market begins to riot, how quickly can they get this banking union actually out there? >> reporter: i don't think very fast. i think anything when it comes to europe, what i would do is i would divide by two the amount of time you think it's going to take. then multiply by .5. >> that's a problem. that's not a good scenario. >> they can't do anything right. >> we keep wondering when spain is going to ask for a bailout. smaghi says they need a bailout. everybody says they need a bailout. we noknow when they're going to ask for a bailout. when their interest rates rise. you're running spain, your ten-year yield is doing fine, you can keep borrowing, why would you get help now? >> that implies they're responding to the capital markets. >> that's all they ever do. >> not to the actual fundamental needs of the entire eurozone. that's a problem. >> repeat, play, repeat, play, repeat. the same story forever.
12:11 pm
steve, good stuff. thank you. >> thanks, michelle. all right. let's get a market flash on an earnings mover. mary thompson watching shares of procter & gamble. >> best performer in the dow today up just about 3%. company's net income declined by 7%. earnings excluding charges exceeded expectations. more importantly, though, the company said it is actually ahead of schedule to cut $10 billion in costs and might seek more cost cuts after that. and it said its growing share in 45% of its businesses, very fwood news for investors. procter & gamble has been the target of activist investor bill ackman who wants a change at the top and more aggressive changes at the consumer goods company. >> who's trading procter & gamble on this news or before it? >> we don't own it. i think the fact they're able to show positive operating leverage, that's what everybody was waiting for. it was either the restructuring was going to start to work or the ceo was going to have to step down. you have a win/win setup into this quarter. i don't know if you want to chase it at 70. it's not particularly cheap at
12:12 pm
16 times. i do think if the company can continue this momentum, it does have upside. i'd just wait for a pullback and i would buy at mid-60s. >> slim shady? >> i agree completely with what stephanie said. the stock broke out this morning. there's been a lot of activists, people, activist involvement in there. you want to wait for a pullback. if you look at it, the bottom line is the company is a little bit expensive and they haven't been hitting on all cylinders. there's names you'd rather buy that are cheaper. >> i would add quickly the consumer staples space as a whole is much too expensive because it's a safe haven yield sector. in reality i would much rather buy health care. health care offers better value for yield. >> a lot of people getting in on that trade. thank you, enis. we're going to see everybody around next block. on the way, three more reasons to be bearish this earnings season. first, windows 8 debuts today. is this microsoft's make or break moment? we'll get answers.
12:13 pm
"halftime" returns after this. fast money isn't just about a bull market. it could be going up, down or sideways. >> in the blink of an eye everything changes. you've got to be able to surround the trade. >> we're all doing what we do for a living and we're all together as a team. but we all come at it from a different perspective. >> it's all about moving the odds into your favor. >> it's really what drives out the value of the show. >> i am john najarian. i am "fast money." >> i am stephanie link. i am "fast money." >> i am steve grasso. i am "fast money." with the fidelity stock screener, you can try strategies from independent experts and see what criteria they use. such as a 5% yield on dividend-paying stocks. then you can customize the strategies and narrow down to exactly those stocks you want to follow. i'm mark allen of fidelity investments. the expert strategies feature is one more innovative reason serious investors are choosing fidelity. now get 200 free trades when you open an account.
12:14 pm
12:15 pm
12:16 pm
windows 8 is all really about enabling through, creative, imaginative devices. pc notebooks, pc desktops, pc laptops. now pc tablets as well that you can touch and interact with and are alive with information. >> that was microsoft ceo steve ballmer speaking with jon fortt about windows 8 this morning on cnbc. hope you tuned in to see it. can the new operating system launch microsoft into the post-pc world and jump start the stock? we have here onset, joe and i, the new surface. their entry into the tablet world. i love all new technology. i'm really quite excited. >> if i were to ask you to go to one of the more popular apps, like facebook, you can't find it. >> it says facebook photos. >> that's not an actual app.
12:17 pm
you want the ability to go to the app. the criticism surrounding this tablet, they do not have the apps in place yet you're going to find with apple or even an n android system. there's two different types of investor. growth investors and income investors. microsoft used to be viewed as growth. microsoft if you can accept its income, it's fine. you own it. it's slow money. >> you harvest. >> dennis gartman has pointed out, in fact, it is a bank. what microsoft is trying to transition here is back into the growth space. and they've failed to do so so far. loo in looking at the surface, in looking at all the products they've brought it i believe they'll continue to fail and not be able to break back into the growth category. >> but it has a red keyboard. >> really cute. >> it's so pretty. and a kick stand at the back. it's awesome. >> that is not going to be enough to drive people out of the apple ecosystem. i will offer to you that most of the enterprise users right now of microsoft products still use
12:18 pm
it because of the ability and the functionality of excel and microsoft word. if you're able to learn the apple ios system and incorporate those two business functions on apple, you're more likely to move completely away from microsoft windows 100% and go solely with apple. i'm inclined to do so. >> all right. you heard it from joe. let's discuss the overall markets right now. it's a whip saw week as investors digest lots of earnings reports coming out. should you be planning on a rally into the year end? should we be betting on a rally to the year end? >> i think the market right now remains tremendously uncertain. stephanie and i were talking before about the fact that the market does not appear that there will be any fundamental catalys catalysts. we are right now at an election standstill. this is an election correction. everyone wants to be long the market. fundamentally it's strong. >> did you hear what david bianca said this morning? it's a good entry point to get into stocks.
12:19 pm
revenue growth isn't as bad as it seems. we have another guest who's not quite so bullish. gina martin adams from wells fargo has more on this. so good to have you here. you disagree with david bianco. >> i do. the fundamental case is actually weakening going forward. take a look at the sequence of earnings growth. we really started to see earnings teeter in the second quarter. that's continued into the third quarter. this is all a sequence that started in europe last year. and deteriorating export growth is the beginning. but the fiscal cliff uncertainties are exacerbating the impact. >> what if that gets solved? does that turn things around? >> if europe gets solved? >> no. the fiscal cliff. europe getting solved i have no hope for. >> all we need from europe is just a sign that things are no longer getting worse. we're still not seeing that. we just got pmis over the last week that suggests things are deteriorating. in terms of the fiscal cliff, i don't even know that we necessarily need to solve the fiscal cliff. we just need to have a revival in sentiment, revival in
12:20 pm
confidence. that probably comes with simply a plan getting set. we don't need to necessarily solve the nation's deficit issues. but we need to set a credible plan for doing so sometime in the future. that's what we're missing. that's creating a deterioration of confidence which is creating a negative feedback loop. >> gina, housing, auto, aerospace, these are all positives that are going on here in the united states. china seems to be stabilizing in a bottoming kind of process. europe is off the front page. valuations are not extended. earnings, okay, i'll give you that, they're not great. but i think a lot of bad news is discounted in. what are you thoughts there? >> i'm not sure a lot of bad news is discounted in to be quite honest. if you look at where the multiple is from the june low to the september high, we had multiple expansion that equated to the trough to peak expansion affiliated with qe-2. we had some pretty tremendous multiple growth in that period. the result was a mult pl that was sitting a full standard
12:21 pm
deviation above its trend line. for us that's a signal to get more cautious. in terms of the other factors we agree housing is starting to improve. auto market looks stable. household spending looks stable. that's reflected in our sector allocation strategy which is highly focused on consumer segments of the market. more defensive segments of the market. more domestic sectors. i'm not sure i want to read too much into china. chinese stocks are recovering. copper prices are not. you've got a little bit of conflicting signals out of china. quite frankly i think what's happening is investors are suggesting why don't we get new leadership in china, too, over the next month. it may reignite growth in china. i'm not sure i want to go there until i know for sure it's going to happen. >> thanks for joining us. enis, have i cut you off four times today? >> that's right all right. >> tell me what you were thinking. what she was saying about consumer staples reminded me of what you talked about earlier in the show and whether or not they're expensive. >> i was going to ask her whether she thought that it was simply a confidence issue or, in fact, that the business cycle
12:22 pm
had turned. because generally throughout the american economy's history, it's been a pretty standard four to six year business cycle. to me based on commentary we've seen throughout earnings from companies in many different industries we're on the downturn part of the business cycle no matter what confidence does. >> how does that weigh in on what your thoughts are on microsoft, dennis? >> i'd say on microsoft specifically i agree with what joe was saying in terms of the fact this is a software company that's trying to move into the hardware space. it's tried for many years. it hasn't been successful in doing that. is it cheap at ten times? yes. is it nice it offers a 2% dividend yield? yes. but i'd rather by intel than microsoft if i think the pc cycle is going to turn at any point. i don't think it will. but i don't think microsoft is a buy. >> but the read keyboard is so cute. sorry. >> i just think in this tech wreck we've seen in the last week and a half, microsoft, i've not been a fan over the last couple of years. but i think at 27 it's kind of interesting with the yield. >> everybody hates it.
12:23 pm
everybody hates it. >> i like that. i like that. that's number one. number two, it's not all pc. 25% of revenues are pcs. they've got enterprise. they've got servers. i think there's other things. i don't think this can go to 40. but i think at this level your risk/reward is probably pretty good again with the dividend yield as well. >> marshall? >> what i didn't like ballmer had to say this morning, he kept pointing out the pc. i read that to mean they do need the pc to pick up in order to get growth. i don't like the microsoft story. i think the overall market is still a very fast moving stock pickers market. like the home builders numbers have been great there. the stocks did get ahead of themselves a little bit. look for a pullback there before you get in. >> how are your hands going to look on that red keyboard? ahead on the halftime report, the evolution behind speed trading and why new rails may not prevent glitches. more regulations that don't achieve the intended effect. who knew? plus, find out why top fund
12:24 pm
manager nathan sandler is not betting on china. and we head to the pits to break down speculation that trouble is brewing in the treasury market. those stories and more when we return. when you take a closer look... ...at the best schools in the world... ...you see they all have something very interesting in common. they have teachers... ...with a deeper knowledge of their subjects. as a result, their students achieve at a higher level. let's develop more stars in education. let's invest in our teachers... ...so they can inspire our students. let's solve this.
12:25 pm
[ female announcer ] want to spend less and retire with more? then don't get nickle and dimed by high cost investments and annoying account fees. at e-trade, our free easy-to-use online tools and experienced retirement specialists can help you build a personalized plan. and with our no annual fee iras and a wide range of low cost investments, you can execute the plan you want at a low cost. so meet with us, or go to etrade.com for a great retirement plan with low cost investments. ♪ for a great retirement plan with low cost investments.
12:26 pm
thank you, mr. speaker, uh, members of congress. in celebration of over 75 years of our government employees insurance company, or geico...as most of you know it. ...i propose savings for everyone! i'm talking hundreds here... and furthermore.. newcaster: breaking news. the gecko is demanding free pudding. and political parties that are actual parties! with cake! and presents! ah, that was good. too bad nobody could hear me. geico. fifteen minutes could save you fifteen percent or more on car insurance.
12:27 pm
stephanie link and steve weiss clashed on their outlook for this name. take a listen to this fight. >> bali is the only one that makes money. >> they came down and said they expect $100 to $120 a ton. >> they're making money at $30 a ton, steve. >> they can make money. doesn't mean it's not a short. i'm not saying they're going to lose money. i'm just saying it's overvalued. >> do you see what brazilian mining can do to a person? shares are basically flat since that discussion. what is the trade right now, stephanie? steve's not here. forget about him. >> forget about steve. the reason we bought vale to begin with, two reasons. the stock is down 50% from its high. expectations were very, very low. the second reason isn't a play
12:28 pm
on china. there is definitely a bottoming going on in china. because of the rate cuts, rrr cuts, liquidity measures, you're starting to see some better data. we're not out of the woods by any means. i was encouraged to see better export data, better retail sales, better industrial production. a lot of stuff actually getting a little bit better. i think for vale which ships 44% iron ore to china, they have great exposure. to be able to beat the quarter yesterday in ebitda by 15% to the consensus, pretty impressive in this environment. they've lowered costs. they're doing what they can do in a difficult environment. i think you're at trough earnings and trough evaluations. i'd recommend holding the stock. >> weiss, take that. yield on the u.s. 10-year note still hovering near record lows. quietly there has been a bit of a selloff in the bond market. are treasuries in trouble? jackie deangelis has her eye on this story. she's also the host of a new online show on cnbc.com called
12:29 pm
"futures now." >> this is a big development as retail investors have plowed record amounts of money into bonds this year. take a look at this chart for a second. with today's drop in prices on the 10-year note we've broken through a key support level. that's why rates are rising. remember, as bond prices fall, the yields rise. is this a temporary blip or is now the time to get out of treasuries? let's start talking futures now. rich l. chizen and anthony grisante. rich, let's start with you. >> don't fight the fed. this is a temporary blip. look at all the headwinds in the next couple weeks. the election. fiscal cliff. most hedge funds close their books at the end of october. what do they do with all that cash they made in the equity market in the commodities? they're going to go into safety until we get some answers out of the election and et cetera. fade the move. >> jackie, i think when you look at fight the fed, the operation twist does end at the end of the year.
12:30 pm
i think people realize that. i think they're actually starting to get out of bonds because of that. i think that's the only thing that kept bonds supported or at these record levels where they are. >> rich, what are you levels at this point? >> listen, i want to buy the futures. again, i'm fading the yield. i'm getting long the 10-year note. 121.38. my target is in that range. look at your daily chart. 133.28. risk is 781.25 to make two grand. i like this trade. >> romney wins and suddenly there's a change in who's running the federal reserve. do you think that's a possibility? what would that do to the treasury market, anthony? >> yeah, i think there's a definite possibility. i think romney wants to stop this whole qe bond buying program and everything else. the question is how long does bernanke stay? tuz he realize the writing's on the wall and he wants to fwet out now or later. i definitely think that could affect the market and that could put pressure on the downside also. >> we're buying the dip in the
12:31 pm
10-year futures. we're looking to go long the market now. now you know how our guys are making money in the futures market. what about you? which do you think is a better buy? stocks or bonds? logon to futuresnow.cnbc.cole. vote in our poll. we'll give you results in our live streaming show 1:00 p.m. eastern. tune in today. one and only peter schiff is going to join us and tell you how to play gold right now. >> that'll be great. he's always a great guest. thank you, jackie. coming up on "the halftime report," this luxury casino and resort raising its dividend after earnings beat the street. should investors roll the dice? he delivered alpha for you on cnbc this summer. >> there are three repressive, repugnant, rogue countries that i think over the next one to three years will experience massive, you know, political changes. cuba, north korea and sudan.
12:32 pm
i think all three are interesting from an investment standpoint. >> unfortunately for him, you can only buy one of them. find out where ice canyon managing partner nathan sandler is seeing opportunities now, when we return. we're halfway through the trading day. next, we cover the day's dead cat bounces. the island reversals. the breakouts and breakdowns. in pops and drops. plus, they say the dumb money trades in the morning and the smart money trades into the close. we reveal what that smart money is buying and trading before that final bell tolls. when the "halftime report" continues.
12:33 pm
12:34 pm
12:35 pm
time for the top three trades. focus on the big earnings movers. pulte topping expectations, missing on revenue, stock falling 5% today after a very big run. slim shady, what do you do here? >> i don't think you jump in right here, michelle. it's getting interesting. the company announced earnings. what we're really watching on all these home builders are their orders. orders were up 27%. if you look in dollar terms
12:36 pm
orders were up 43%. the stock reacted positively but then sold off after we got that data out at 10:00 on the housing sector. i think it comes down a little bit more. you're a buyer of pulte. >> see the sharp move on the intraday heart. next up under armour topping expectations reported higher sales across all segments. investors wanted more. the stock falling 7% today. stephanie, what's the matter? >> yeah. the earnings were good. the revenues were double digits. but at 34 times forward estimat estimates, people need more. the guidance was actually just basically in line. let it settle. because i think it is interesting that on the gross margin side there are things they're doing in their supply chain that's going to help on the gross margin side. and so i think you'll still continue to see double digit sales. then you have this margin kicker. so i think you'll be able to have upside to earnings. let it settle here for now. >> then there's wynn resorts. improved results from the las
12:37 pm
vegas casino. stock higher by 6%. >> it's really returning capital to the investor that the street is sending shares higher on. $7.50 was a special dividend. then a regular dividend increase from 50 cents to a dollar. 100% increase. the street was expecting a dividend raise. i don't think it was as significant as you're seeing here. i think this is a recuring theme for a lot of companies right now. specifically to wynn i think you could own the name utilizing a 1.10 stop. >> big call on china today. morgan stanley says the country's economy is showing signs of a recovery. pointing to gdp, exports and retail sales. our next guest not so sanguine. let's bring in nathan sandler. we welcome you back to the show. co-founder and managing partner at ice canyon, a firm that specializes in emerging markets, fixed income and credit opportunities. good to have you here. the ultimate question we ask every day, china, is it bottoming, is it going to get worse? what are you thoughts? >> it's a cyclical story and
12:38 pm
structural story. in 2008 barack obama invoked the use of the phrase the fierce urgency of now. in repeated reference to the choices that the u.s. faced. i don't think any phrase captures the urgent challenges and the pivotal challenges that are at work today in the global economy. particularly at three important focal points. the u.s., europe and especially china. china has four issues right now. they have a growth model that i think is being called into question. they have macro and financial imbalances that have only been intensifying and are a direct result of, you know, the growth model that is no longer sustainable. they have an increasing probability as a result of financial crisis where i think the risks are -- are rising significantly. and then, finally, they have
12:39 pm
endemmic corruption and income disparities which will ultimately be a long-term drag on growth. when you put that all together, i think we're at a very important crossroads for china. it's really reform and place the economy on a long-term sustainable path and albeit lower growth rate, 7% or lower, or without reform, i think the risks of an increasingly -- >> hard landing? >> hard landing or increasing costly financial crisis that will take many years to clean up. >> so those are huge, huge issues. you've described them so well. what do you do ultimately if you're thinking do i buy copper? because i think the economy is going to do a, b, or c or is it too difficult to call at this point because you have to answer those questions? >> it's too early to call because you have one of the most important leadership transitions. >> two weeks from now. >> two weeks from now. i think that's really going to
12:40 pm
dictate the direction of where all of this is headed. now, i would agree with morgan stanley. the cyclical side seems to have stabilized for the moment. there are some incipient signs that the new government that is coming together in china is at least discussing much deeper reforms which would be long overdue. and if they are able to consolidate power quickly enough and implement those reforms, i think it would send a very powerful message to, you know, the global markets. >> your top picks right now. >> in countries or? >> if you were anywhere. you have the whole world at your feet. >> i think one of the most interesting election outcomes, and this was actually a very interesting year. because we've had national elections or major leadership changes in countries basically amounting to over 50% of global gdp. so there's a lot of voting
12:41 pm
taking place. and right now, you know, with the u.s. still to vote, i think one of the most interesting elections was in mexico. i think mexico is showing some early signs of finally being ready to attack very serious structural reforms that could really unlock the productive capacity of that economy. it started with labor reforms. and now we're very hopeful that the government will pursue its commitment to open up the foreign -- the oil and gas sector. >> energy sector. >> for foreign investment. >> enis has a question for you. >> in the last year we've seen developed markets that have high consumer demand, so consumer related economies like the u.s. or turkey, even, outperform. we've seen china, brazil, the countries that are much more current account balance surpluses actually underperform. going forward over the next year, do you see that continuing where consumer weighted
12:42 pm
economies in the emerging markets and elsewhere are going to be the outperformers? >> i think you have to. as long as your expectation is that the advanced economies grow at below trend growth, that's still our base case view, clearly the economies that are dependent on exports to the advanced economies are going to underperform. countries that are moving toward their own domestic consumption models or domestic investment models should outperform. i think that's really what makes, you know, china's choices at this moment so critical. because they really need to abandon the dependency that they have on export markets. and they need to abandon the dependency they have on investment in sectors of the economy already filled up with overcapacity. >> nathan, i wrote about him on cnbc.com. he's leading the lonely fight to try to get hedge funds here in the united states to be able to buy cuban debt, currently prohibited. there are london hedge funds
12:43 pm
that have been amassing it. for the last two weeks there have been heavy rumors fidel castro might be on life support, brain dead. we've got these photos. very quickly make the case about why you should be able to not be participating in the embargo on this case. >> well, we think we've submitted a very strong application for a license that would enable us to buy the defaulted debt of cuba. there's about a stock of $8.2 billion of debt. the staff was basically loans that were made by international banks, predominantly european banks to the cuban government. series sort of 83, 84, 85. they've been in default for 30 years. the case for our application, and this falls squarely under the embargo as it's currently constituted, but ofac has full right to grant any license,
12:44 pm
including this one. and our case to ofac was not the obvious one. we don't think this is a contra vengs of the embargo at all. in fact, we think our application very much supports the current policy and doesn't require the embargo to be lifted. there's really three main reasons. >> we have time for one. >> okay. the big one is this has no direct impact whatsoever in terms of financing the cuban government. we're actually reinforcing u.s. policy -- current u.s. policy by bringing these assets increasingly under the control of ofac and the treasury. >> ofac is the foreign asset control office for those who haven't followed this issue. a lot of legislators don't seem to understand by buying defaulted cuban debt doesn't mean dcastro gets any more mone right now. na as we head to break here, shares of apple selling off ahead of earnings. still to come on the "halftime
12:45 pm
report" the biggest pops and drops in today's trading. wow, look at that. [ male announcer ] do you have the legal protection you need? at legalzoom, we've created a better place to turn for your legal matters. maybe you want to incorporate a business you'd like to start. or protect your family with a will or living trust. legalzoom makes it easy with step-by-step help when completing your personalized document -- or you can even access an attorney to guide you along. with an "a" rating from the better business bureau legalzoom helps you get personalized and affordable legal protection. in most states, a legal plan attorney is available with every personalized document to answer any questions. get started at legalzoom.com today. and now you're protected. since ameriprise financial was founded back in 1894, they've been committed to putting clients first.
12:46 pm
helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader. the heart of a one-to-one relationship. together for your future. ♪
12:47 pm
sfwlnchts from the glass enclosed headquarters on "power lunch" today america's top ceos on the fiscal cliff warpath. calling on congress to cut the deficit thousannow. we'll talk to one of the ceos.
12:48 pm
when it comes to saving for retirement many americans have a lot of catching up to do. like me. whether you're a boomer or just beginning your career, we have some smart ways to boost your nest egg. microsoft unveiling windows 8 today and its new tablet tomorrow. is this the defining moment? ceo steve ballmer spoke to us first on cnbc. now back to michelle on the "halftime report." >> we want to point out the hedge fund manager david einhorn is speaking at the buttonwood gathering of policymakers, bankers and regulators now. this is a live picture. we're going to be monitoring his comments for any market movers. even if it doesn't go well for him, don't feel bad. he was short chipotle which has just been a disaster over the last week. first, what's getting the most buzz today on twitter? seema mody joins us with your tweets. >> we talked about it earlier in the show. twittersphere is reacting.
12:49 pm
could apple miss earnings? let's get to the next one. some traders not so sure. m. bentley says he's staying out of apple shares today tweeting it's a gamble today. nobody knows if apple will, in fact, miss. michelle, traders, what do you think is driving the negative sentiment around apple earnings? guys? >> joe? >> the negative sentiment surrounding apple earnings. i think a lot of it has to do with the expiration cycle that we've talked about with john and pete najarian in september and both october. i think right now there's really no known catalyst. the known elements of apple are known. the vulnerability of this 200-day moving average which we talked about at the top of the show, the market seems to want to gravitate towards there. what do you do there? that's the ultimate question. i think it comes down to what the guidance will be, the expectations for the amount of iphones they sell in the december quarter. ultimately the usages of cash. $100 billion on that balance sheet. what are they going to do with it? >> sitting at session lows for
12:50 pm
apple. enis, you want to weigh in? >> earnings momentum. if you look 100% year over year. that's exceptional growth. that's why the stock is five times higher than it was three years ago. now consensus expectations for the next couple years is around 20%. all of a sudden you start missing earnings expectations of 20%, it becomes a much harder story. >> you think you could do a show about apple every sij day? >> you probably could. i'd like to add the sentiment around apple was so positive for so long, when the door opens up a crack and the negativity started to pile in and the stock sold off from $705 down to now almost $605, i think there's just too much negativity priced in and this is still a company that, if you've bet against them at all in the last seven or eight years, you've been taken out pretty badly. i think you still have apple disappointing before i'd turn
12:51 pm
the page on it. coming up, machines gone wild. a look at whether new rules can really rein them in and prevent flash crashes. back in two minutes.
12:52 pm
12:53 pm
is high-speed trading slowing down? the nasdaq reporting a slide in high-frequency trading volume that sent its profits tumbling, but as other countries attempt to rein in fast traders, will similar efforts work here? sean gurley, a physicist, former
12:54 pm
consultant to nasa and head of a global software company. you would advocate a speed limit on trading. right? spl we need to move back from the bleeding edge to cut back to a speed limit of ten milliseconds. >> and now? >> you can get down to microseconds. >> why would that happen? >> you need diversity of strategies. when algorithms are competing so quickly, they don't have time to be very smart. slow them down a little bit and you get a little more time to make calculations. ael golgorithms get a little mo smarter. >> from .001 millisecond to .01 milliseconds? >> when you slow down, you can eschew more bits of information. >> if you want to limit speed, why not go back to the 1930s when my grandfather used to
12:55 pm
drive a model a down to the office. if you want to wait until everybody knows all the information, halt all trading for 24 hours. it seems counter intuitive to try to slow down the biggest innovators in the market. >> one of the things that we want innovators pushing towards zero speed -- >> why not? >> everything looks the same. >> so? >> so you don't have a market that functions. >> is eventually people lose. right? because they realize, i don't know the market doesn't function. maybe you didn't like the way the market responded. >> the global market collapses. >> the global market hasn't crashed! >> flash crash 2010. >> i mean one flash crash and that's almost taken care of it. >> we're having flash crashes every day. stocks bump up, bump down and we don't even see it. >> we have to go. gosh, i'm so upset! we can have the conversation later. thank you so much for joining us. trading day for kids, a fund raising initiative to raise
12:56 pm
money for thousands of kids at risk in new york city. over 100 hedge funds are placing trades. all commissions from today's equity trades are being donated to youth geek. take a listen. >> my stock is johnson & johnson. i believe it is a really reliable company. >> one of the big things i'm seeing is boeing and general dynamics are increasing their stock as well. >> i would choose to sell apple, galaxy s3 would be a better phone than the iphone 5. that's why i'm questioning why the iphone 5 sales have been so great. >> good job. great things. coming up in the next hour -- america's top ceos banding together to force congress to solve our fiscal mess. we're going to speak with one of those ceos about the big plan. but first, final trades here next on the halftime report.un r] this is steve. he loves risk. but whether he's climbing everest, scuba diving the great barrier reef with sharks, or jumping into the market, he goes with people he trusts, which is why he trades with a company
12:57 pm
that doesn't nickel and dime him with hidden fees. so he can worry about other things, like what the market is doing and being ready, no matter what happens, which isn't rocket science. it's just common sense, from td ameritrade. which isn't rocket science. if we want to improve our schools... ... what should we invest in? maybe new buildings? what about updated equipment? they can help, but recent research shows... ... nothing transforms schools like investing in advanced teacher education. let's build a strong foundation. let's invest in our teachers so they can inspire our students. let's solve this.
12:58 pm
12:59 pm

27 Views

info Stream Only

Uploaded by TV Archive on